Question
You want to calculate the WACC for a public company (your choice). If possible choose Starbucks(or any company of your choice, please attempt to complete
You want to calculate the WACC for a public company (your choice). If possible choose Starbucks(or any company of your choice, please attempt to complete as much as you can, even if you can't fully answer the question, thank you!). A. State the company that you chose. Find out the company's ticker symbol, create hyperlinks to the web pages that you will need to find all of the information necessary to calculate the cost of equity. Use a market risk premium of seven percent when using CAPM..
Ticker symbol:
Stock quote link Stock price: $
Dividend: $
Key statistics link Beta:
Shares outstanding:
Bond center link:
Risk-free rate:
Market risk premium: 7.00%
Market value of equity:
Cost of equity CAPM:
B. Create hyperlinks to go to the FINRA bond quote website and the SEC EDGAR database and find the information for the company's bonds. Create a table that calculates the cost of debt for the company. Assume the tax rate is 35 percent.
Maturity | YTM | Quoted Price | Book Value | Market Value | Market Value Weight | Market Values |
Total Market Value | = | $ | - cost of debt= | % |
Tax rate: 35%
Aftertax cost of debt:
Cost of equity:
Market value of equity: $
Aftertax cost of debt:
Market value of debt: $
C. Finally, calculate the market value weights for debt and equity. What is the WACC for the company?
Weight of debt:
Weight of equity:
WACC:
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